US CMBS Delinquency Rate Plunges Thanks to Loan Resolutions

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Trepp released its January 2016 CMBS delinquency report today, highlighting the massive drop in the delinquency rate.

CMBS Delinquency Rate by Month

The huge improvement in the CMBS delinquency rate is certainly an encouraging sign...the volume of troubled loans keeps falling.

Trepp LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate, and banking markets, released its January 2016 US CMBS Delinquency Report today (available at http://info.trepp.com/january-2016-us-cmbs-delinquency-report-pr).

Driven by the resolution of the $3 billion Stuyvesant Town/Peter Cooper Village loan, The Trepp CMBS Delinquency Rate underwent its largest improvement in over three years. The delinquency rate for US commercial real estate loans in CMBS is now 4.35%, 82 basis points lower month-over-month. Year-over-year, delinquencies for US commercial real estate loans have fallen 131 basis points.

In January, CMBS loans that were previously delinquent but paid off with a loss or at par totaled a whopping $5.8 billion, with $3 billion of that coming from StuyTown. Over $1.7 billion in loans became newly delinquent, while about $300 million in loans were cured last month

“By most measures, it’s been a tough start to the year for CMBS,” according to Manus Clancy, Senior Director at Trepp. “Spreads have widened sharply and volatility has spiked, while liquidity remains an issue. However, the huge improvement in the CMBS delinquency rate is certainly an encouraging sign. CMBS investors can hang their hat on the fact that legacy problems continue to be resolved and the volume of troubled loans keeps falling.”

After months of being the worst performing major property type, the multifamily delinquency rate plunged 597 basis points to 2.31%. The apartment sector is now the best performing major property type. The office sector had the second highest improvement in January, dropping 55 basis points to 5.24%.

For additional details, such as delinquency status and historical comparisons, download the January 2016 US CMBS Delinquency Report at http://info.trepp.com/january-2016-us-cmbs-delinquency-report-pr. For daily CMBS commentary, follow @TreppWire on Twitter.

About Trepp
Trepp, LLC, founded in 1979, is the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their operational efficiencies, information transparency and investment performance. Trepp serves its clients with products and services to support trading, research, risk management, surveillance and portfolio management. Trepp is wholly-owned by dmgi, a division of the Daily Mail and General Trust (DMGT).

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Joe McBride
Trepp
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